Wednesday, April 17, 2013

So I suspect I should apologize. Here I am talking about the future projections for energy production that have been made by companies such as ExxonMobil and Shell, as though they were still the key and only players in the world. Yet, in reality, Saudi Aramco (12.5 mbdoe); Gazprom (9.7 mbdoe) and National Iranian Oil (6.4 mbdoe); appear in the list before ExxonMobil arrives (at 5.3 mbdoe), and then there is PetroChina (at 4.4 mbdoe) before BP arrives (at 4.1 mbdoe) and it is only then that we find Shell, which lies 7th at 3.9 mbdoe.

So the projections of the ExxonMobil’s of the world are of somewhat lesser value than they might, at one time, have been. (For those curious the list continues with Pemex (at 3.6 mbdoe); Chevron (at 3.5 mbdoe) and Kuwait Petroleum Co (3.2 mbdoe). This not only rounds out the top ten, it also closes out the list of those producing more than 3 mbdoe. (Abu Dhabi comes next at 2.9 mbdoe).

Yet, with those caveats, and recognizing that Saudi Arabia now produces only slightly less than ExxonMobil, Shell and BP combined, let me review the BP forecast, having already completed that for ExxonMobil and Shell. And while the latter two looked sufficiently far into the future as to obfuscate a little their shorter-term projections, BP is still focusing on the relatively short-term that runs to 2030.

Within that time frame BP expects overall energy demand to grow by 36%, though, as with the ExxonMobil projection, BP expects that a “tremendous increase” in energy efficiency will continue to develop, thereby slowing the need for future resources. They point out that, without this improvement in efficiency, global energy supply will need to double by 2030 in order to sustain economic growth.

This is particularly true for the United States, which BP sees approaching self-sufficiency in Energy, while it is the continued growth in demand from countries such as China and India and the Asian Pacific countries that provide most of additional need. Comparing their view from 2 years ago with the present there does not appear to be much change in the overall forecast. (Note that after the first two figures all the remainder come from the 2030 BP Energy Outlook).

Figure 1. Comparison of BP data and projections for population growth between their 2011 report (left) and that for 2013 (right)

Figure 2. Comparison of current and anticipated energy demand through 2030, from 2011 (left) and 2013 (right) BP reports.
There is a small increase in the overall demand from non-OECD countries in the more recent projection, but not a great difference. But this increase in demand reduces from a growth averaging 2.1% in the 2010-2020 time frame, to a growth of 1.3% in the following decade.

Within the period to 2030 BP anticipates that all major energy sources will continue to see an increase in overall energy production.

However, there is a change in the ranking of the different fossil fuels from the earlier projection. For while, two years ago, BP were projecting that coal, oil and natural gas would virtually tie in terms of market share by 2030, coal is now given a more dominant role, with natural gas falling below oil.

Figure 4. Change in market share for the different energy sources.

Coal is, within this time frame, not really bounded by available supply, though BP anticipate that more will be produced indigenously in the Asian Pacific than at present. Partly one assumes that this is necessary for financial reasons, although it will also be a need-based growth as the countries increasingly need electric power.

In terms of natural gas and oil supply questions are more urgent, and BP provide the following answer.

Figure 5. BP anticipated sources for the anticipated growth in demand for energy.

By far the largest production from the tight oil and gas shales will come from North America, where the current growth in production is anticipated to continue.

Figure 6. Anticipated production of tight oil and shale gas by region in 2030

One of the drivers that BP see, in the fall in oil demand, comes from its continued high price. This has already significantly lowered the use of oil as a power generating fuel, and the continued high price will drive the move to vehicles of increasingly greater efficiency. Thus, although global liquid fuel demand will continue to grow, it will only be at the rate of 0.8% pa, reaching 104 mbd by 2030. The sources to meet this are various:

Figure 7. Liquid fuel supplies through 2030

With the conventional supply of crude from non-OPEC countries diminishing, OPEC crude levels can be seen to increase over the next seventeen years, while the major increase in production from tight oils is anticipated to come from North America. In 2030 it will provide 9% of overall demand, providing almost half of the 16.1 mbd of overall increase in production. The increase will, however, slow post 2020, as the costs of production and the limits of the resource base.
BP make the following prediction:

The US will likely surpass Russia and Saudi Arabia in 2013 as the largest liquids producer in the world (crude and biofuels) due to tight oil and biofuels growth, but also due to expected OPEC production cuts. Russia will likely pass Saudi Arabia for the second slot in 2013 and hold that until 2023. Saudi Arabia regains the top oil producer slot by 2027.

Other than tight oil, BP anticipates some increase in biofuel production, and from the oil sands, with significant increase in Iraqi production, and some gain from the remaining OPEC countries (one suspects Venezuela is included here) and from NGL production.

The largest increments of non-OPEC supply will come from the US (4.5 Mb/d), Canada (2.9 Mb/d), and Brazil (2.7 Mb/d), which offset declines in mature provinces such as Mexico and the North Sea. The largest increments of new OPEC supply will come from NGLs (2.5 Mb/d) and crude oil in Iraq (2.8 Mb/d).

In this regard BP believes that currently OPEC has a spare capacity of around 6 mbd, but will continue to cut production to sustain prices over the decade.

BP see roughly a 7% p.a. increase in shale gas production with most coming from the United States, Mexico and Canada. This will bring total natural gas production to 459 bcf/day by 2030. Of this North America will see a growth in production of 5.3% pa and by 2030 will be exporting roughly 8 bcf/d. In other countries the biggest growth will be in more conventional natural gas production, coming from the Middle East (31 bcf/d), Africa (15 bcf/d) and Russia (11 bcf/d).

This increase in supply, and the greater use of LNG tankers is likely to keep natural gas prices relatively stable.

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Waterjetting Index

After writing about Waterjet Technology for a couple of years at this site I have created an index, hopefully this will be updated monthly and can be found at: Waterjet Index .

The Archive of Oil and Gas and Coal Posts

About ten years ago I began to write a blog, and after a time that transformed into co-founding The Oil Drum. Move on a few years, and at the end of 2008 I turned from being an editor there to this blog, although the OGPSS series continued to be posted, on Sundays, at TOD as their weekly Tech Talk. Some of the industrial technical descriptions of oilwell formation and coal mining are relatively timeless and useful, and so are listed below.

Along the way I became similarly cynical about some of the facts being bruited about Climate Change, and did a little study, which is documented here as the State Temperature Analysis Series. It showed that the UHI is real and that there is a log:normal relationship between population and temperature (which is also related to altitude and latitude). You can read the individual state studies, which are listed below. There will still be the occasional post on this topic.

Just this last year I was asked to write a weekly blog on the application of High-Pressure waterjetting – which is the subject that I specialized in for four decades.That too is now, therefore, a part of the contribution.

And, in my retirement, I have become curious about Native Americans and what they looked like.And so I am now learning Poser and related programs, and may inject both posts and the odd illustration – helped by the many real artists who work in that medium, as I read and try and comprehend what went on in the depths of The Little Ice Age (around 1600 – 1700).

Because I am a Celt, there will also be the odd post on my lineage and some of the DNA studies that relate to history.

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Units and Conversions

One of the problems in following stories in different countries is that they use different units and symbols. This can be a bit confusing, and so, where I can, I will try and standardize on the unit of barrel/day, or bd for oil. I will also use a thousand cubic ft kcf for natural gas. Prices will also be standardized, when I can, in $/kcf for natural gas, $/barrel for oil, and $/gallon for gasoline.

In larger units volumes a thousand barrels a day becomes 1 kbd and a million barrels a day becomes 1 mbd. For natural gas a million cu ft per day will be 1 mcf. (In many quotes this has appeared as 1 MMcf).

A billion cu. ft. is 1,000 mcf. Note that a cubic foot of gas produces 1,030 Btus - so to simplify 1 million Btu's is approximately 1 kcf, or 28.3 cu.m. of natural gas equivalent.

A ton of oil is 7.33 barrels. (Mainly used in Eastern Europe).

Since not all posts before this show these units - note that this change happened on March 3, 2009.